Many people will set up a testamentary trust as part of the estate planning process. This provides them with an easy way to preserve assets for future generations without giving them directly to a beneficiary through a will.
Testamentary trusts are also something that many individuals won’t be familiar with when they approach the estate planning process. To help, here are three different assets that can be preserved in an testamentary trust.
1) Interest-bearing cash and financial products
In the event your estate contains a substantial amount of cash, it is possible to include this within a testamentary trust, so the interest generated from the bank account is then distributed to the beneficiaries of the estate.
The same approach can be taken for financial assets like bonds and shares that return a dividend similar to a bank account. With these assets likely to make up a substantial portion of your estate, placing them within a testamentary trust can be a useful strategy to take.
2) Real estate
Family homes and investment properties can also be contained within a testamentary trust, in order to preserve these for future generations. This will of course also depend on the ownership structure in place – a property that is owned jointly with another person will pass to them.
3) Valuable family heirlooms
While property and financial products can create dividends that the beneficiaries then receive, it is also possible for a trust structure to protect assets that don’t generate a regular income. Valuable pieces of furniture, for example, or paintings and artwork, can be placed in a trust in order to protect them for the future.
No matter what assets you are looking to protect, a testamentary trust is a useful legal structure to consider establishing through your will. To include a trust in your estate planning, make sure to get in contact with a specialised wills and estates lawyer.